Law of Contracts | Exam Questions with
Solutions | 2026 Update | 100% Correct -
Verified
‣ In 1955 the act's name was changed to -✓✓the Texas Real Estate License Act
(TRELA)
‣ In 1939 the Texas legislature passed the -✓✓Real Estate Dealer's License Act,
which required real estate agents to obtain licenses.
‣ What is the difference between an addendum and an amendment? -✓✓An
addendum is a document attached to and made a part of the original contract. An
amendment is a document that makes a change to the ratified sales contract.
‣ What is a contingency? -✓✓A provision in a real estate contract that specifies the
contract would cease to exist upon the occurrence of a certain event.
‣ Define counteroffer. -✓✓An offer made in response to a previous offer by the
other party during negotiations for a final contract
‣ What does the term proration mean? -✓✓The amount of or the act of determining
a portion or share of a cost or benefit to be allocated between two parties
‣ The purpose of TRELA and the rules of TREC are to what? -✓✓Protect the
Public
‣ A license holder may help a party read the documents but must not offer what? -
✓✓Legal advice or opinions
‣ If a licensee participates in the unauthorized practice of law, what may happen to
him or her? -✓✓Suspension or revocation of the licensee's license
‣ What actions if done to a contract by a licensee would be construed as the
licensee acting as an attorney? -✓✓Drawing lines through words or adding words,
phrases, or sentences to the contract
, ‣ In commercial real estate sales and leases, what is customary for both buyers and
sellers and tenants and landlords to have? -✓✓Legal counsel throughout the
transaction
‣ What committee operates today according to the Texas Real Estate License Act
and under the jurisdiction of the Texas Real Estate Commission? -✓✓Broker-
Lawyer Committee
‣ Explain what the Broker-Lawyer Committee does. -✓✓The Committee is an
advisory body which drafts and recommends certain contract forms to TREC for
use by license holders. The TREC directors review the Committee's
recommendations and then approve and promulgate the forms.
‣ During the time a new form is being introduced by TREC, which forms should
licensees use? -✓✓Licensees can use either the old form or the new one.
‣ Define fraud. -✓✓An act of deception which was done deliberately by someone
to get an unfair advantage over someone else
‣ Define misrepresentation. -✓✓Misrepresentation is created when a licensee made
a misleading statement or a false statement that was accepted as fact from a
customer or client and the person was damaged by relying on that information.
‣ What is the purpose of the Deceptive Trade Practices Consumer Protection Act? -
✓✓To protect the public from deceptive, false, or misleading business practices
‣ Under the DTPA, the plaintiff must give the potential defendant 60 days warning
about what? -✓✓The intention to file and an outline of the complaint and damages
‣ What does TRELA Section 537.11 use of Standard Contract Forms state? -
✓✓When negotiating contracts binding the sale, exchange, option, lease or rental
of any interest in real property, a real estate licensee shall use only those contract
forms promulgated by the Texas Real Estate Commission for that kind of
transaction.
‣ TREC does not promulgate which forms and agreements? -✓✓Listing or buyer
representation agreements, property management contracts, forms for commercial
Solutions | 2026 Update | 100% Correct -
Verified
‣ In 1955 the act's name was changed to -✓✓the Texas Real Estate License Act
(TRELA)
‣ In 1939 the Texas legislature passed the -✓✓Real Estate Dealer's License Act,
which required real estate agents to obtain licenses.
‣ What is the difference between an addendum and an amendment? -✓✓An
addendum is a document attached to and made a part of the original contract. An
amendment is a document that makes a change to the ratified sales contract.
‣ What is a contingency? -✓✓A provision in a real estate contract that specifies the
contract would cease to exist upon the occurrence of a certain event.
‣ Define counteroffer. -✓✓An offer made in response to a previous offer by the
other party during negotiations for a final contract
‣ What does the term proration mean? -✓✓The amount of or the act of determining
a portion or share of a cost or benefit to be allocated between two parties
‣ The purpose of TRELA and the rules of TREC are to what? -✓✓Protect the
Public
‣ A license holder may help a party read the documents but must not offer what? -
✓✓Legal advice or opinions
‣ If a licensee participates in the unauthorized practice of law, what may happen to
him or her? -✓✓Suspension or revocation of the licensee's license
‣ What actions if done to a contract by a licensee would be construed as the
licensee acting as an attorney? -✓✓Drawing lines through words or adding words,
phrases, or sentences to the contract
, ‣ In commercial real estate sales and leases, what is customary for both buyers and
sellers and tenants and landlords to have? -✓✓Legal counsel throughout the
transaction
‣ What committee operates today according to the Texas Real Estate License Act
and under the jurisdiction of the Texas Real Estate Commission? -✓✓Broker-
Lawyer Committee
‣ Explain what the Broker-Lawyer Committee does. -✓✓The Committee is an
advisory body which drafts and recommends certain contract forms to TREC for
use by license holders. The TREC directors review the Committee's
recommendations and then approve and promulgate the forms.
‣ During the time a new form is being introduced by TREC, which forms should
licensees use? -✓✓Licensees can use either the old form or the new one.
‣ Define fraud. -✓✓An act of deception which was done deliberately by someone
to get an unfair advantage over someone else
‣ Define misrepresentation. -✓✓Misrepresentation is created when a licensee made
a misleading statement or a false statement that was accepted as fact from a
customer or client and the person was damaged by relying on that information.
‣ What is the purpose of the Deceptive Trade Practices Consumer Protection Act? -
✓✓To protect the public from deceptive, false, or misleading business practices
‣ Under the DTPA, the plaintiff must give the potential defendant 60 days warning
about what? -✓✓The intention to file and an outline of the complaint and damages
‣ What does TRELA Section 537.11 use of Standard Contract Forms state? -
✓✓When negotiating contracts binding the sale, exchange, option, lease or rental
of any interest in real property, a real estate licensee shall use only those contract
forms promulgated by the Texas Real Estate Commission for that kind of
transaction.
‣ TREC does not promulgate which forms and agreements? -✓✓Listing or buyer
representation agreements, property management contracts, forms for commercial
